Freight rates for Russian oil to India stay at record highs amid Black Sea risks and tanker shortage

In brief

• Freight rates for Russian crude shipped from western ports to India stayed at record levels in late October.
• Urals freight to India is now about $30 per barrel or more, up from about $20 in September.
• Shipowners have not agreed to cut rates despite requests from sellers.

Record freight costs on the western route

Tanker rates for moving Russian crude from the country's western ports to India were still at record highs at the end of October, three people active in trading and shipping told Reuters. Risks in the Black Sea, a shortage of vessels and a jump in global demand for tankers were cited as the main drivers. (Reuters: Ставки фрахта танкеров для нефти РФ остаются рекордно высокими, это увеличивает ее расходы – liga.net) (Tanker shortage keeps Russia-India oil freight rates at record highs – bairdmaritime.com)

Price per barrel and per voyage

For Urals crude headed to India, shipping now costs roughly $30 per barrel, and sometimes more, with the exact figure varying by shipowner and destination. In September the figure was around $20.

The sources gave voyage costs for two vessel types:

| Route and vessel | September | Late October | |---|---|---| | Baltic to western India, Aframax (about 100,000 tonnes) | $13–16 million | about $23 million | | Black Sea to India, Suezmax | about $19 million | about $30 million | | Baltic to India, Suezmax (about 140,000 tonnes) | n/a | about $27 million |

Why it matters for sellers

Western sanctions push most Russian crude out of Baltic and Black Sea ports toward Asia, mainly India and China, on long and expensive routes. Higher freight therefore lands directly on exporters, who say shipping costs are now eating into their revenue more than before.

Shipowners hold their ground

Sellers have asked shipowners for lower rates, but vessel owners have not agreed to cut them, the sources said. (Стоимость доставки российской нефти в Индию достигла рекордных значений – ОСН – osnmedia.ru)